Full-time RVing: Sell the house to hit the road?

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By Russ and Tiña De Maris

One of the critical issues for those considering the full-time RV lifestyle is whether or not to sell the “landlocked” home. It’s not only a financial and physical question, it also touches deeply on the heart. After all, you may have raised the kids here, cultivated friendships, and seen important milestones. Much must be weighed in the balance.

Many have found “selling” to be helpful. They point out they no longer have property taxes and insurance to pay, no worries about maintenance and upkeep while on the road. They don’t fret about what vandals or burglars may do in their absence. Sale of the house for some makes the purchase of a traveling rig possible.

On the other hand, some point out that keeping the home has its advantages. If good quality renters can be found, keeping the house can serve as an investment and provide needed income. Others leave the house empty, but for their furniture or other possessions they have no room for in the rig. Some feel safer, always having a “home base” to return to if something doesn’t pan out on the road.

Making the move to the full-time lifestyle is not something to be considered lightly. Individual circumstances vary. Some take a middle-of-the-road approach and hang onto the house for some time, seeing how they adjust to road living. Then, if things are going well, they eventually sell their old homestead and stick with the road life, tucking away the proceeds from their home sale in a safe investment, hedging against life’s uncertainties.

HERE’S ONE WAY OF LOOKING at this whole equation: If you’re planning on using the house as a home base, you’ll most decidedly not want to sell out. Are you going off full-timing with a partner? If one of you isn’t quite so sure about it, then you’ll probably want to think twice before selling the homestead.

Plan on full-timing for a few years, but figure you’ll want to come back to a sticks-n-brix lifestyle? That’s probably the toughest decision position of all. You might be ahead to sell the house – freeing up your life from complications. But on the other hand, who can predict what the real estate market will do – will you be able to buy back in down the road? You’re in the best position to make the call, as you’re the one(s) that have the most “inside” information.

Sometimes the call is simpler. You’ve got full-timing in mind, but don’t have the money to get a suitable rig without selling the house. Herein lies another hitch: Can you sell the house soon enough to meet your plans without “taking a bath” by cutting the price back too far? On the other hand, perhaps the market in your area is on fire – what if the house sells before you’re ready to hit the road? Can you negotiate a turn-over date with your buyer that will work for you both? Or might you be stuck moving temporarily into an apartment or (gasp!) in with the kids?

Finally, if you do decide to divest yourself of your home, there’s all those “things” you own to take into account. We’ll tackle that in a future piece.

##ft11-17; ##RVT1277

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rv parts store
2 months ago

The moment you step into the car it’s hard to get away from each other. The time you spend talking and playing lots of fun games with your child will help you bond with them like never before, plus you’ll see a carryover when the road trip ends.

TravelingMan
5 months ago

Considerations if you keep a home…

If you are thinking that is could be an “investment”, it’s more of a money pit than anything (in most cases). Add up the following over the duration that you are keeping the home:

Mortgage interest, taxes, insurance, electric, water, natural gas, well and septic maintenance, cable bills, mowing 26 times a year, carpet, furniture, refrigerator, washer/dryer, water heater, furnace, A/C, roof, painting, raking leaves, landscape maintenance, and the general cleaning. Time is money if nothing else. What would you rather do with your time? And how do you make that big mortgage payment if a job is suddenly cut out from under you?

When you own a home, you are generally limited in your vacation time away from home and the bills keep coming.

If it is rented out, there is the added expense of hiring a management company, finding suitable renters that won’t tear up the house (adding costs) and hiring qualified and timely repairmen to make repairs in the middle of the night while you are away. Renters by the way, are just continuing the wear and tear to appliances, carpeting, etc while you are not there.

To give a better example of our personal case, we once owned a home that we purchased for $200,000. Over 25 years, the house is now valued at $450,000. Would we have come out ahead? No. That $200,000 mortgage would have cost us another $200,000 or more in interest. The taxes were running $8,000 and are now more than $14,000 25 years later. The City came in an annexed the property driving up taxes and water bills as wells were no longer allowed. The electric bill back then was averaged at $200 a month. Likely a lot higher today. By now, the roof, carpet, appliances, etc would have needed to be replaced. Some, more than once. If we had rented that house out, the management fees would have been expensive. We likely would have had periods where qualified renters would have been hard to come by. And who knows how many repairs would have needed to be made by renters who did not tell you about the dogs or other animals they had.

Sure, there are some tax benefits. But if we added all this up, we would still have lost money. The older a house gets, the less it really appreciates. There is a peak period and from there, the appreciation slows down (typically).

Had we taken that same amount of money and put it in the market or 401k, who do you think would have come out ahead? We have to live somewhere but the key is reduce the expenses. RV parks/campgrounds are not cheap. There are maintenance fees to own an RV. But we don’t pay outrageous and ridiculous realtor fees, title fees, property taxes or utilities. HAD WE DONE THIS YEARS AGO instead of being brainwashed by bigger is better, we believe we could have retired much, much sooner.

And the bigger the house, the more “stuff” you collect. One day, your kids are going to have to deal with that. It will be a BIG burden on them. By downsizing and living the RV lifestyle, you have less. Have your bank accounts with a POD (Paid on Death) clause, retirement accounts with beneficiary’s, titles in both your name and kids name, having a Trust Fund for valuable assets, that leave very little for your kids to have to deal with. Just the titles to the RV and tow vehicle. They can be in and out of Probate in a flash and enjoying what you left them behind with. AND, you don’t really have anything of value left in the RV for anyone to steal.

Life is finally a pleasure and full of new adventures every day.

Make a spreadsheet and carefully weigh whether keeping a house is really worth it to you. Maybe it is. Maybe it is not.

Steve S
5 months ago

Hi, I sold my home in a big city, downsized and paid cash for a mobile home. No more mortgage, insurance dropped by 60%. I do have to pay a monthly fee to the mobile park even when I am not there.

The profit from the sale of my house was invested into monthly dividend stocks. I live off the dividends … the principle investment hasn’t been touched. I also was able to retire at 55!!!!

I can now snowbird, in my Class B, from November to April each year. I boondock 95% of the time. However, when I either get bored or can no longer travel, I still have a place to go back to.

You must have an exit strategy before full timing … think about the day you can no longer live in your RV, what are you going to do?? Kind of important.

Tom B
5 months ago

If you’re an empty-nester and have a house bigger than you need, full-timing can be a good excuse to downsize on the house. You can then buy a smaller house that’s closer to the action (moving from the ‘burbs into the city), or to a location with lower property taxes (likely more rural). You can buy this place before you full-time, or wait. If you wait, you can take your time looking for the right deal, as you already have a place to live in your RV. Personally, I plan on selling and finding an apartment, but if you’re really set on owning, these are options.

I’m not a fan of becoming a landlord. Everyone i know who has a rental property has been burned at least once by a tenant that has trashed the place.

Hanging on to your house has the opportunity cost of lost investment income on the equity. Sell it and you can invest it and easily make 6-7% in dividends on that money, while not having to pay for property taxes, utilities, lawn care, insurance, snow removal, etc. $100K in equity can net you $6000-$7000 in dividend income. Double that for $200K invested. That alone can pay for a lot of expenses on the road.

Jim
5 months ago

One, realistically, no one can RV full-time for ever. I mean, who wants to be ill and in their 80’s living in an RV they can longer afford to repair, and end up sitting in the back corner of an RV park somewhere. Having said that, and because you will always have to pay for a place live somewhere, why not an apartment?

TravelingMan
5 months ago
Reply to  Jim

Having a back-up, exit plan can save you from what you call a disaster. I know I would not want to be in that condition. Failing to plan = a plan to fail. There are many alternatives that do not include a physical house. We have backup plans for the US and abroad. BOTH include alternatives that are far less than owning a home and the living conditions are far superior. The same could also be said about medical care…

The way that RV’s are made, it is very true that no one can live in an RV forever. Many won’t even last 5 years without MAJOR repair work.

Expand your horizons and explore the alternatives. Have a vision of your later years. Plan your future. Don’t wait for it to fall into your lap. You are (currently) in control if you plan correctly. If you don’t know how, solicit help. Otherwise, one might just end up in the situation you describe…

Terri Foxx-Wishert
8 months ago

We leased out our home,, intending to come back some day. We use a professional leasing company, who does all of the screening. The agent has every type of repair person practically on speed dial. We go back in the summer and do the heavy work for the landscaping – routine landscaping is part of the expense of the rent. The rent covers the mortgage payment, the agents %, the repairs and landscaping.
We routinely get offers to purchase our house, and it has remained in excellent condition.
We do occasional improvements, so that it will remain in good shape and desirable, if we need to rent it again. This year, it was a new furnace, and the old one was at the end, and beyond, it’s useful life. We added air condition.

Ron Jewell
8 months ago

There is one thing I have never seen discussed about going full time. When my mother entered assisted living, we sold her house and needed the money to pay her rent. I want the money from my house to pay for future expenses if necessary. I don’t want to use it to buy an expensive rv that will depreciate, nor to pay the expenses of being a full timer. We take our trailer on an extended trip each year, but not full time.

Bill T
8 months ago
Reply to  Ron Jewell

Hi Ron. Agreed. When my wife and I downsized and sold our home, we used the money to set up a nest egg for future expenses and planned to travel with the rest. The traveling money is finite so we planned to do some extended trips for about five years into our retirement. We live in a comfortable two bedroom apartment that we use as a home base and to have a place to call home when our travel days are through. We really enjoy RV travel but we know it’s not going to last forever. My wife and I believe in the “R” in RV’ing. “Recreational” travel. We are happy for the folks that can do it full-time but here in Canada the climate doesn’t suit for year round RV’ing and budgeting, for the trips we do take, requires planning. Cheers.

TravelingMan
8 months ago

For us, we weighed keeping or disolving.

Renting out is fraught full of headaches…just imagine you are on the road and 4000 miles away…

Who runs the advertising and background checks on tenants. There are still taxes, insurance, utilities that always need to be paid. There are the repairs. What if a tenant takes it out on the house when they move out? The dishwasher, water heater, Heating and Air that always seem to break at the most inopportune time. Who mows the yard, trims the bushes, paints the house, waters the yard?

Assuming you hire a management company, the fees are horendous. You still have to hire landscapers and the like to take care of your property. More money…

Then, there is the accountants who manage your tax returns and you have to keep all that paperwork for the IRS for years. Tax deductions aren’t what they used to be.

If you listen to all the so called experts, we are on the verge of a housing bubble with so many retirees wanting to downsize or get out and not enough millenials coming into the market who want or can afford to buy your place. How can anyone making minimum wages and deep in college debt afford it? Even with two working members? One has to ask how much further can housing prices continue to go up?

Then, you have to make the bills while no one is renting.

Just too many headaches….

For us. We sold out. We have no regrets. It did take 8 months to liquidate everything. You have to plan ahead. No one wants your old stuff.

Initially, we used Craigs List for the things that had some value.

We used garage sales (had to pay for City permits and had so many restictions).

We tried to give away stuff to family members who didn’t want it.

We resorted to an Estate Sale (that cost 50%).

We resorted to an Auction Service (another 50%).

We donated a ton to charities.

And finally, the garbage man had to send two trucks to haul away what was left.

Before you think we lived in a mansion…we’re talking about 1600 square feet in a small town…

If you plan to sell out, plan ahead; give yourself plenty of time; think 10-25% of what you paid for anything; be prepared to give away a lot.

Also keep in mind that if the RV lifestyle does not suit you, you can find a lot of free things or buy stuff like you used to have for very cheap prices. We figured we could work just two months and buy it all back if we had to – now that we know better.

If you keep your property, be sure you understand how this affects your travel budget. Would you rather spend $1000-2000 a month just trying to keep that property? Or use that same money (without getting into your RV budget money) to have a lot more fun?

Sink Jaxon
5 months ago
Reply to  TravelingMan

Great reality check!!

Rick G
8 months ago

We went full time in May of this year. We own a home and at first our only solution was to sell it. We have rented it in the past with mixed results and feelings whether we should rent again. In renting or selling the same issue arises that we don’t have a home that is easily there to come back to for lets say a week or month if there are medical or family problems to deal with. My wife came up with what I fell is a great solution in that we put it up on Airbnb and rent it nightly. We can black out dates to come back in the area if we want or need. The daily rent is much better than the monthly that we could get from long term. We charge a cleaning and pet fee and that goes directly to one of the kids for extra income. It has worked very well for us so far not to say there hasn’t been a couple of small issues that have been easy to work out. And in all we do have a home to come back to when we decide to stop this lifestyle. A win-win.

Bill T.
8 months ago

Hi Russ and Tina. Thanks for the article. I would like to offer another solution that works good for my wife and I. We sold our home to help finance our travels and set up our retirement nest egg for later. We downsized and moved into a nice two bedroom apartment to have both a home base and a place to go when our travels are done. It is great because we can just lock the door behind us, whenever we want to travel, without worry of insurance, maintenance etc. We decided on this for two reasons.

One, realistically, no one can RV full-time for ever. I mean, who wants to be ill and in their 80’s living in an RV they can longer afford to repair, and end up sitting in the back corner of an RV park somewhere. Having said that, and because you will always have to pay for a place live somewhere, why not an apartment?

Reason two, is that in our area rent price increases, in buildings built prior to 1991, are government controlled to a maximum annual increase percentage value. Entering the rental market now, allows us to pay cheaper rent 10 years down the road than those just entering the market then. We store our motor home at a local storage place and launch our trips from there. This solution gives us the choice of having a home base, to take a break from our extended travels and have a place set up and ready to go when our travel days are done. Perhaps this maybe another choice for your readers who, like us, were/are looking for more retirement options. P.S. With an apartment, unlike a condo or house, there is no lawn to cut, snow to clear or any associated major repair costs, maintenance/upkeep cost or condo fees.
Cheers.

Alaska Traveler
8 months ago
Reply to  Bill T.

Although we understand we cannot full time forever, we will try. Fortunately we have the funds to keep up repairs and/or replace our rolling home. We started this journey in 2008, sold our house in 2016 since we were renting it out anyway…Had a huge month long garage sale and leftovers went to charity. Since we are in our mid 70’s, we will be forced by health someday to stop…..😢. We will probably see it coming and will deal with it then….

Corrina Lee
7 months ago
Reply to  Bill T.

This makes absolute sense to me. Where did you rent your apartment?

Bill T
5 months ago
Reply to  Corrina Lee

We live in Belleville Ontario Canada.